LG reports fourth quarter results

LG has posted its fourth quarter 2009 results. LG shipments increased 32% year on year to 33.9 million units, but revenues were down 5% from the same period in 2008.

LG performed particularly well in emerging markets and Western Europe and North America. Francisco Jeronimo, research manager for European Mobile Devices at research firm, IDC, estimates that LG achieved a market share of 12.4% in the quarter, its highest to date, and consolidated its third position on the market, widening the gap with Sony Ericsson.

However, the strong commitment to increased market share impacted profitability due to price erosion. The success of its mid tier touchscreen devices shows how capable LG has been in understanding what consumers want and value.

Nevertheless, Jeronimo added that LG understands that it needs a strong market share even if this impacts profitability, because most of the global and big carriers worldwide do not list products from players with a small installed base. LG and Samsung have been able to increase their client bases by presenting innovative products at affordable prices, and operators have learned that LG products sell well and are keener to include its products in their portfolios.

LG estimates demand will rise in 2010, and is targeting 19% growth in unit sales to 140 million, with a strong focus on smart phones. LG announced a new business unit last week that will focus only on smart phones and will unveil several devices running Windows Mobile and Android over the year. In Jeronimo’s opinion, this represents an important move and a clear message to the market: LG wants to succeed and to become a leading manufacturer in smart phones, which will lead it to higher market share in the fastest growing and most profitable segment of the market.